United States: FERC Green-Lights Puerto Rico Offshore LNG Import Terminal; Project's Ocean-Going Regasification Unit Is First Of Its Kind Before The Ferc

This project afforded the FERC with its first opportunity to make a jurisdictional determination concerning an ocean-going Floating Storage and Regasification Unit.

On July 24, 2015, the Federal Energy Regulatory Commission (FERC) issued its authorization pursuant to Section 3 of the Natural Gas Act[1] for the siting, construction and operation of the Aguirre Offshore GasPort (GasPort),[2] subject to certain environmental and operational conditions. The GasPort is a liquefied natural gas (LNG) import facility to be located approximately three miles off the southern coast of Puerto Rico near the towns of Salinas and Guayama. The GasPort is being developed in cooperation with the Puerto Rico Electric Power Authority for the purpose of supplying natural gas to the Aguirre Power Complex electricity generating facility, which is the largest generating facility on the island. The Aguirre Power Complex is undergoing facility modifications to allow it to utilize natural gas in addition to fuel oil and diesel fuel, with the accompanying benefits being a cleaner-burning and less-costly fuel source.

The applicant and project company, Aguirre Offshore GasPort, LLC (Aguirre LLC), is a wholly-owned subsidiary of Excelerate Energy L.P. [Note: Duane Morris LLP is counsel to Aguirre LLC and Excelerate Energy for the matters discussed herein.] The GasPort's principal components are the offshore berthing platform, the interconnecting subsea pipeline and the Floating Storage and Regasification Unit (FSRU). Aguirre LLC's project is precedent-setting because it is the first LNG terminal to come before the FERC designed exclusively for use with an ocean-going FSRU, which is known as an Energy Bridge Regasification Vessel (EBRV). The EBRV is an LNG carrier vessel, equipped to comply with applicable U.S. Coast Guard regulations, that has an integrated regasification capability.

After participating in the FERC's pre-filing process, Aguirre LLC filed its application on April 17, 2013. Upon filing, the FERC assumed the role of lead agency to conduct the environmental review pursuant to the National Environmental Policy Act of 1969 (NEPA),[3] as well as the regulations of the Council on Environmental Quality[4] and the FERC,[5] culminating in a final environmental impact statement.

This project afforded the FERC with its first opportunity to make a jurisdictional determination concerning an ocean-going FSRU. While the FERC during a prior offshore LNG terminal project proceeding found the FSRU to be a jurisdictional project component,[6] that FSRU was not self-propelled so it did not have the ability to travel on its own. In the instant proceeding, the FERC found the EBRV to be a non-jurisdictional facility within the overall project. The FERC explained that the EBRV is outside the scope of its jurisdiction because the definition of an LNG terminal set forth by the Natural Gas Act excludes "waterborne vessels used to deliver natural gas to or from any such [LNG terminal] facility."[7] While the EBRV will be moored to the offshore berthing platform during regasification operations, the EBRV will be able to move and travel on its own, thereby making it a waterborne vessel. Notwithstanding the FERC's jurisdictional determination, indirect environmental impacts of the FSRU were addressed in the FERC's environmental review.

The GasPort's jurisdictional project components are the offshore berthing platform and the interconnecting subsea pipeline. The offshore berthing platform will be designed to allow the EBRV and an LNG carrier to dock in a parallel configuration for delivery of LNG. The subsea pipeline will be an 18-inch diameter steel pipe with a 1.5-inch concrete coating, about four miles in length. It is anticipated that it will be placed using both trenching and horizontal directional drill (HDD) techniques, depending on the presence of seafloor coral and other aquatic vegetation. The FERC explained that using HDD construction methods through the Boca del Infierno pass would greatly reduce impacts on corals and other benthic species, and it is requiring Aguirre LLC to file an HDD implementation plan for that purpose.

The project was subject to extensive environmental review under NEPA. As part of its analysis, the FERC, as the lead agency, examined several categories of environmental issues and impacts, including air quality, geology, soils, water resources, wetlands, vegetation, wildlife, fisheries, noise, special status species, land use, recreation, socioeconomics, cultural resources, reliability and safety, cumulative impacts and alternatives. Of particular significance was the FERC's alternatives analysis under NEPA, which responded to comments from other federal agencies. The FERC examined the proposed and three alternative offshore platform sites, along with the proposed pipeline route and five alternative routes. The FERC found that these alternatives presented no significant environmental advantages over the proposed offshore platform location and the proposed route if the portion of the proposed route through the Boca del Infierno pass is accomplished using the HDD construction methods.

If you have any questions about this Alert, please contact Sheila Slocum Hollis, Ilia Levitine or Dennis J. Hough in the firm's Washington, D.C. office, any of the attorneys in our Energy, Environment and Resources Practice Group or the attorney in the firm with whom you are regularly in contact.

Notes

[1] 15 U.S.C. § 717b (2012).

[2] Aguirre Offshore GasPort, LLC, 152 FERC ¶ 61,071 (July 24, 2015).

[3] 42 U.S.C. § 4321 et seq.

[4] 40 C.F.R. Parts 1500-1508.

[5] 18 C.F.R. Part 380.

[6] Broadwater Energy LLC, 122 FERC ¶ 61,255 (Mar. 20, 2008).

[7] 15 U.S.C. § 717a(11).

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